DVLA urged to consider number plate recognition

An NAO report has said the Driver and Vehicle Licensing Agency (DVLA) should consider using automatic number plate recognition to estimate the level of vehicle tax evasion.

The report (pdf) says that despite receiving many plaudits for its electronic vehicle licensing (EVL) system, which enables customers to pay vehicle excise duty (VED) and obtain a licence online, the DVLA has experienced a significant rise in tax evasion.

As a result, the DVLA has little prospect of achieving its evasion target of 2.5 per cent by December this year, or meeting its related Gershon efficiency target to generate, through the reduction in evasion, an additional £70m in revenue each year by the end of March 2008.

According to the Department for Transport's (DfT) roadside survey in June 2006, VED evasion has risen to five per cent, up from 3.6 per cent the previous year. The survey also estimates that the proportion of unlicensed motorcyclists has increased to 37 per cent from 30 per cent in 2005.

Outlining the findings in its report published on 19 July 2007, the National Audit Office recommends that the DfT and DVLA "should consider alternative sources of evasion estimates, such as automatic number plate recognition systems, even if they are only partial and closely targeted".

The report qualifies this, however, by stating that the increase in VED evasion may partly be a result of people wanting to avoid congestion charging and being caught for crimes through ANPR enforcement.

The report concedes that as ANPR is usually targeted at particular risks, the results would need expert statistical interpretation if such data were to be used to estimate the overall level of evasion across the country. But it also highlighted the advantages of ANPR data, describing it as "geographically pervasive, covers the whole period under review and scans far greater numbers of vehicles during the year than the roadside survey".

The NAO also says the EVL scheme has failed to close the licensing gaps that existed in the old Post Office paper based system. The DVLA issues late licensing penalties to those who have not renewed their licence two months after the end of the previous expiry date. But customers who obtain a licence starting a month after their previous one has expired are not issued with a penalty notice.

According to the NAO, the situation reflects the length of time it used to take for the Post Office to notify licensing activity to the DVLA. As the EVL was designed as an electronic parallel to the Post Office system, the same licensing gaps may occur.

Some £450m (10 per cent) of VED revenue was collected through the EVL system in 2006-07, its first full financial year, but the agency has neither estimated the VED revenue lost due to licensing gaps, nor analysed its impact on evasion rates.